Penguin Solutions, Inc.
$71.41
+0.15%Penguin Solutions, Inc. engages in the designing and development of enterprise solutions worldwide. It operates through three segments: Advanced Computing, Integrated Memory, and Optimized LED. It offers dynamic random access memory modules, solid-state and flash storage, and other advanced integrated memory solutions for networking and telecom, data analytics, artificial intelligence and machine learning applications; and supply chain services, including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging services. The company also provides Penguin Computing that focus on technical computing for core and cloud environments through high-performance computing and AI solutions; and Penguin Edge, an edge computing solution for embedded and wireless applications, such as high-performance products for government, health care, manufacturing, and telecommunications applications. In addition, it offers Stratus, which provides simplified, protected, and autonomous fault tolerant computing solutions in the data center and at the Edge through hardware and software services; and solutions to education, energy, financial services, government, hyperscale, and manufacturing markets. Further, the company provides LED chip products comprising blue and green LED chips based on gallium nitride, and related materials under Cree LED brand; and surface mount devices under the Cree LED XLamp and J Series brands. It sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers. The company was formerly known as SMART Global Holdings, Inc. and changed its name to Penguin Solutions, Inc. in October 2024. Penguin Solutions, Inc. was founded in 1988 and is based in Grand Cayman, Cayman Islands.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is elevated (P/E 246.2).
Valuation inputs: P/E 246.2, earnings yield +0.4%, momentum +0.1%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is soft (ROE +3.6%, ROIC +3.7%).
Profitability stack: net margin +1.6%, ROE +3.6%, ROIC +3.7%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceRisk profile is balanced but has notable pressure points to monitor.
Risk factors: liabilities/assets +62.4%, momentum +0.1%, net margin +1.6%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Penguin Solutions, Inc. Market vs Earnings Trajectory
Performance Analysis
EPS Growth
Strong earnings growth indicates robust business expansion and improving profitability.
Price-EPS Relationship
Stock price is moving in line with earnings growth—a healthy sign of fundamental-driven valuation.
Stock Price Change
Over the 1Y period, stock price has increased by 274.9%.
P/E Ratio (TTM)
Very high P/E suggests premium valuation or high growth expectations.
Key Insight
Stock price (+274.9%) is outpacing earnings growth (+148.6%), suggesting the market may be pricing in future growth. Monitor if earnings can catch up to justify the valuation.
Penguin Solutions, Inc. Fair Value Envelope
Penguin Solutions, Inc. Profit Bridge
Profitability Analysis
Gross Margin
Moderate margins typical of competitive industries. Monitor for pricing pressure or rising costs.
Operating Margin
Acceptable margins but limited operational leverage. Operating expense control is important.
Net Profit Margin
Minimal profitability after all expenses. Limited financial flexibility for reinvestment or shareholder returns.
Effective Tax Rate
Higher tax burden may reflect limited tax optimization or operations in high-tax jurisdictions.
Profitability Insight
Room for improvement: Moderate profitability with opportunities to enhance margins through better cost management or pricing strategy.
Penguin Solutions, Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Minimal working capital impact on FCF. Changes in operating assets and liabilities well-managed.
Cash Flow Quality Insight
Exceptional cash generation: High-quality earnings converting to growing free cash flow. The company demonstrates strong pricing power, efficient operations, and disciplined capital allocation.
Penguin Solutions, Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Excellent liquidity position. The company can easily cover its short-term obligations with substantial cushion.
Debt-to-Equity Ratio
Elevated leverage. Debt exceeds equity, which amplifies both gains and risks. Monitor debt servicing ability.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Asset-light business model with high liquidity. Majority of assets are easily convertible to cash.
Financial Health Insight
Mixed signals: Strong short-term liquidity provides comfort, but high overall leverage requires careful monitoring of debt servicing capabilities and refinancing risk.
Penguin Solutions, Inc. Street Expectations Map
Wall Street analysts project that PENG stock may decline over the coming 12 months. The consensus 1-year price target stands at 45.50, with estimates ranging from a low of 25.00 to a high of 66.00.
The consensus 1-year price target stands at 45.50, with estimates ranging from a low of 25.00 to a high of 66.00.
Analyst Consensus Analysis
Upside Potential
Significant downside risk. Stock trading well above analyst consensus suggests elevated valuation concerns and potential correction.
Analyst Agreement
High uncertainty. Very wide target spread indicates significant disagreement among analysts—major valuation uncertainty or transformation underway.
Risk-Reward Profile
Unfavorable risk-reward. Downside risk exceeds upside potential. Consider defensive positioning or alternative opportunities.
Analyst Conviction
High uncertainty: Wide dispersion indicates analysts struggle to agree on valuation—proceed with caution and independent analysis.
Market Sentiment Insight
Extreme uncertainty: Massive dispersion in price targets reflects fundamental disagreement on business trajectory. This could signal transformation, disruption, or complex valuation—requires deep sector expertise and contrarian mindset.
Penguin Solutions, Inc. Insider Positioning
During the last 12 months, insiders have sold $3.74M worth of PENG shares, with no buying activity reported.
3 Months
0
0.00
75.1K
2.72M
-2.7M
-$2.72M
3-6 Months
0
0.00
15.4K
310.41K
-310K
-$310K
6-9 Months
0
0.00
29.7K
644.87K
-645K
-$645K
9-12 Months
0
0.00
2.7K
69.06K
-69K
-$69K
Top Buyers
No buying activity
Top Sellers
Clark Joseph Gates
Officer: Svp And Pres, Optimized Led
$1.30M
Nayyar Sandeep
Director
$890K
Straub Maximiliane C
Director
$684K
Pacheco Jack A
Officer: Evp, Coo, Pres, Integrated Mem
$256K
Adams Mark
Director, Officer: President And Ceo
$248K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $3.74M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchases—may warrant investigation into company developments.
Insider Participation
5 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.
Insider Activity Insight
Multiple red flags: Heavy selling, numerous sellers, and continued recent selling create a concerning pattern. Investigate fundamental drivers and consider whether company guidance or industry conditions have deteriorated.
peng Dividend History
Learning Layer
Related Guides
Build conviction on PENG by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.